Business, Legal & Accounting Glossary
Divergence occurs when the trend of price doesn’t follow the trend of its indicator.
Traders make transaction decisions by identifying situations of divergence, where the price of a stock and a set of relevant indicators, such as the On-Balance-Volume, are moving in opposite directions.
Bullish divergence: the indicator is making a new high while the price does not.
Bearish divergence: the indicator is making a new low while the price does not.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Divergence are sourced/syndicated and enhanced from:
This glossary post was last updated: 23rd March, 2020 | 1 Views.